“Migration out of cash into higher-yielding equities will probably continue unless there’s some sort of resurgence of really bad economic vibes out of Europe or China, or the US," Djerriwarrh managing director
Ross Barker
said.

Mr Barker’s comments come after recent figures from Mercer showed funds that invested in high-yielding shares raked in the best returns during the year to December.

Fund managers recorded an average 20.3 per cent return in 2012, a sharp contrast to the previous year’s 10.4 per cent loss.

Companies with predictable earnings and dividends, including telecom giant Telstra, Wesfarmers and the big four banks, have been the darlings of the market in 2012 and helped boost investor returns.

The comments also come after the listed investment company, which has a market cap of about $926 million, reported a profit of $19 million for the six months to December 31, a drop of 17.9 per cent from the previous corresponding period.

The group’s net operating result was down a marginal 0.4 per cent to $19.1 million during the same period.

Mr Barker said the group’s profit and net operating results were impacted by unrealised gains or losses on open options in the LIC, including the Hasting Diversified Utility Fund.